Thursday, November 17, 2016

Hougan: What about emerging markets? They’re also taking it on the chin this morning. Can you own them?Gartman: Well, the dollar’s getting strong and foreign currencies are getting weak. That’s beneficial to their stock markets. But I’ll leave fishing in the emerging markets to people wiser than I am.If you must look into emerging markets, look at India. It has the best government right now. I have enormous respect for Prime Minister Modi.Hougan: One sector that caught my attention today is financials, which is moving up big: Is that a long-term move, or a kneejerk reaction anticipating less regulation?Gartman: Financials understands that interest rates are going higher, spreads will widen, and it will be a better environment for banks. Banks make no money when interest rates are at zero; they make a lot more money when interest rates are at 5%. So it will be a better environment for banks going forward.Hougan: What about gold?Gartman: I am now, have been and will continue to be bullish on gold in euro-denominated terms.If you look at the adjusted monetary base, it has tumbled in the U.S. … as the Fed stopped experimenting with quantitative easing. The same cannot be said in Europe, where the monetary authorities have had no choice but to continue. Their economies are still mired in deflation and far underperforming the economies here in the United States.So I think the euro will fall well below par to the U.S. dollar, and if I believe that—and the charts are telling me that too—why would you buy gold with a rising dollar when you could buy it in a devaluing euro? I think it’s the best of all trades.Hougan: We’re roughly two months away from Inside ETFs 2017, where you’re giving the closing keynote speech. Between now and then, are you bullish in general? Where would you tell investors to place their bets?Gartman: The trend in equity prices is still from the lower left to the upper right. Weakness is to be bought, especially in infrastructure-oriented equities. If you’re uncomfortable being outright long, there are myriad ways to hedge yourself. But you want to err upon the side of being bullish on stocks.Beyond that, I think you want to err on the side of being bullish on the U.S. dollar and bearish on the euro. I think you want to err on the side of avoiding debt securities, because I think interest rates are going to rise. … If you’re a punter, you probably want to be short the bond market; if you’re an investor, you just want to steer clear. And I think you want to err on the side of being bullish on gold, but specifically in euro terms. That’s my story and I’m sticking to it.

Wednesday, November 16, 2016

The losers are very conservative, fiscally conscious Republicans.There is an old-line of thinking: “Only Nixon could go to China.” In other words, you had to be a hard right-wing conservative to open up Communist China; it was the only way people would accept it. The same phenomenon could happen here: Only a quasi-Republican could throw over the bounds of fiscal austerity and say, “let’s spend money.”Watch what happens: Trump’s going to embrace Bernie Sanders. It will stun everyone, but that’s what’s going to happen. Sanders will get on board; Democrats will get on board; most moderate and liberal Republicans will have no choice but to get on board.Honestly, he’s going to out-Keynes Keynes. And the loser, when that happens—to answer your question—is the bond market.

Tuesday, November 15, 2016

If you own bonds, you’re going to have a hard time in the next year. The peak was made in the bond market weeks ago. Now you’re going the other way, and it could be years of a bear market in bonds.Can the country survive with a 5% yield on the 10-year note? Of course it can. But it will be bad for the bond market. Of course, there are ETFs that will take care of that fact if you want, with the inverse products like the TBT.

Monday, November 14, 2016

The market wants to believe that Mr. Trump’s talk about trade protection, tariffs, building walls and calling people names was simply what he had to do on the campaign trail. His conciliatory acceptance speech—and it really was a conciliatory speech—was perhaps the best speech he’s given in the past year and a half. He seemed to have turned the corner; it was a completely different attitude.The market seems to believe he’s going to spend money on infrastructure—on roads, bridges, airports, port facilities and hospital. The speech indicated he was going to take a different stance than his demeanor indicated on the campaign trail. As soon as his speech was over, the market turned around.You have to take Trump at his word. He used the word “infrastructure” over and over in his speech. That means steel, cement, asphalt and the drilling infrastructure that goes into creating natural gas. They are things that, if you drop them on your foot, they’re going to hurt.Mr. Trump is a builder, and builders build. So as an investor, you go out and find the simple things. I don’t think this fella is particularly interested or adept at high-tech or big pharma; he’s going to use simple things to build buildings, roads and bridges. If you keep it that simple, you’re probably going to do OK. In general, I think Mr. Trump made it abundantly clear that he’s going to invest in infrastructure.

Wednesday, November 9, 2016

I think the world was not prepared for Mr. Trump to win this. So money is fleeing to safer havens — it's going to gold, it's going to the Japanese yen.US DollarI think that we're going to see the dollar become a good deal stronger because of this. I do think that Mr. Trump tends to be somewhat of a trade protectionist. Who's going to be hurt by that? It's going to be the Europeans. It's going to be Germany, that depends so much upon trade exports.GoldI think the benefit goes to the gold market because of uncertainty. I think that's going to happen rather consistently.EnergyThe new president is going to be far more expansionary when it comes to energy. That's going to be helpful to the suppliers of the production of crude. It's going to be detrimental to the crude's price itself.The coal industry itself has been resurrecting on its own, and it's going to do far better. Coal mines will be reopened. New coal production will come on stream. Natural gas ... we will be drilling, drilling, drilling for more.

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